NAIROBI, Jan 16 (Reuters) - Kenya has secured a $750 million syndicated loan for seven years from the Trade Development Bank (TDB) to pay off creditors in another two-year syndicated loan that was extended last year, two banking sources told Reuters on Tuesday.

The government was also set to issue a $1.5 billion Eurobond for 10 years by the first week of March, to take advantage of high demand for new issues, said one of the sources.

“They (the government) know there is appetite out there,” said the source, who has knowledge of the plans, citing a drop in yields of outstanding Kenyan dollar bonds.

Both Kenya’s 2019 issue and the 2024 bond have seen their yields fall by about 100 basis points since November last year.

Officials at the ministry of finance did not respond to a request for confirmation of the information from Reuters.

TDB, a regional bank formerly known as PTA, was also not immediately available for a comment. The terms of the new syndicated loan were also not immediately available.

Henry Rotich, the finance minister, said last November a six-month extension of the syndicated facility had been agreed with 90 percent of investors. Funds raised from a new Eurobond issue could be used to pay off the outstanding amount, he said.

The extension was partly caused by a prolonged presidential election, after the Supreme Court nullified the first vote and ordered a re-run. That disrupted government programmes and raised the political risks associated with investing in Kenya.

Stability has since returned after President Uhuru Kenyatta was sworn in for a second term on Nov. 28, but investors could demand a small premium on the upcoming dollar bond because of the country’s fiscal deficit, which climbed to 9 percent in the year to last June, said the source.

“It is very likely that they will be punished for that,” the source said.